Nigeria’s Inflation Reach 34.19% in June 2024

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Headline CPI (YoY): In June, the Headline CPI (Year-over-Year) reached 34.19%, marking an increase from 33.95% in May, reflecting a 0.71% rise. On a month-to-month basis, the headline inflation rate in June 2024 was 2.31%, which is 0.17% higher than the 2.14% recorded in May 2024.

Core CPI (YoY): Core inflation, which excludes volatile agricultural produce and energy prices, stood at 27.40% in June, up from 27.04% in May 2024. This represents a year-over-year increase of 5.59% compared to the 18.47% recorded in June 2023.

Food Inflation: Food inflation, a significant driver of overall inflation, rose to 40.87% in June, slightly up from 40.66% in May. Year-over-year, it surged by 15.61% from 35.35% in June 2023. This increase was primarily driven by higher prices for groundnut oil, palm oil, and other items in the oil and fats category, as well as water yam, coco yam, cassava, and similar staples
Source: Comercio Partners | NBS

 
Bottom LineLooking ahead, food inflation, the main driver, is expected to taper off because of the short-term federal government’s recent interventions, with a N2 trillion packages announced by Abubakar Kyari, the minister for Agriculture and Food Security, with an aim to curb rising prices and speed up stabilization and growth.

Also, a 150-day duty-free import window has been approved, allowing tariff-free importation of maize, husked brown rice, wheat, and cowpeas through land and sea borders. This measure, with imported commodities subject to a Recommended Retail Price (RRP), aims to provide immediate relief.

However, tackling food inflation long-term means addressing underlying issues like transportation and logistics challenges, harvest losses, and regional insecurity. Moreover, discussions around raising the minimum wage could further fuel inflationary pressures.
On the monetary front, recent interest rate hikes have helped combat inflation, but another hike seems unlikely because of tight macroeconomic environment. However, a focus should shift towards addressing the root causes of inflation without stifling economic growth.

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